An extension of Sports Business News, the largest online sports business news service -- featuring the comments and insights of SBN Publisher Howard Bloom

Wednesday, October 12, 2011

NBA Armageddon 2011: the David Stern blame game

Let’s take a break from our insider look at the NFL’s return to Los Angeles and jump into the NBA lockout blame game. What caught our attention was an ESPN report fingering NBA commissioner David Stern as the reason for the lockout. The report suggested Stern’s legacy is at stake.

The NBA cancelled the first two weeks of the NBA season on Monday after a new collective labor agreement could not be reached.

"He's definitely lost some of his power," one longtime NBA deal-maker told ESPN’s Ian O'Connor. "Because of all the new owners that have come into the league, David had a lot more strength in the last lockout than he has in this one. But he's still the guy running the league, so he's the one whose legacy gets hurt."

"David really wanted to go down as the guy who took the game international," a second agent said in the ESPN report, "as the commissioner who brought Yao Ming to the NBA and opened the door to China and who maybe someday became the first commissioner to have a franchise in Europe.

"But this lockout is going to hurt him. He's usually Teflon, and yet I think this one is going to stick to him."

With all due respect NBA player agents’ opinion of Stern should be taken with a grain of salt. It’s in their best interest to get a deal done.

Last week ESPN reported that a group consisting of agents Arn Tellem, Bill Duffy, Dan Fegan, Jeff Schwartz, Leon Rose, Henry Thomas and Mark Bartelstein were attempting to lead a player movement that would result in the decertification of the NBA Players Association.

ESPN and other media sources reported that Chauncey Billups would sever ties with his agent Andy Miller if Miller were pushing for decertification.

Rip Hamilton told his agent, Leon Rose, that he was upset about Rose's participation and he would end their relationship if Rose continued to pursue decertification.

"The agents are saying they're speaking for the players but in actuality they're not," a source with knowledge said. "They're just taking liberties that they really don't have."

One of the big-name players who received the letter wasn't upset about it, just indifferent.

"To be honest, I didn't even read it," the player said. "My stance is that when Billy and (Derek) Fisher say we've got a deal, I'll be ready to play ball."

So what game are the agents playing and why blame David Stern? Stern likely doesn’t care what the agents say about him. It’s highly unlikely his legacy will be impacted by the current NBA lockout.

Stern did his best to address why the NBA has reached the point they have when he announced the cancellation of the first two weeks of the season.

“I think it's fair to say that we established the positions of the parties with complete certainty of where each stood, and we remain really very, very far apart on virtually all issues.

“From our perspective, last week we were talking with the players about a system that would have taken their average salary from $5.5 million to over $7 million in seven years. The owners have made, I think, concessions on guaranteed contracts, length of deal, no roll backs, and no cap. But the issues on the competition side, in order to have 30 teams be as competitive as they can and tell our fans that our markets and our teams could compete for a championship if well managed, have separated us greatly. “With respect to the tax level, the tax, the exceptions that taxpayers could use, the individual player contract length, all even the raises where the last proposal saw the players request raises of 10 and a half percent and 9 percent in contracts for Bird players and 9 percent and 7 percent for other players, and at a time when our economy is growing very slowly.”

Late last week several media pundits suggested, almost guaranteed, a new CBA would be reached in time to ensure the full 2011-12 NBA season would be played. With no meetings currently scheduled between the two groups, it’s probable there will be more cancellations announced.

Stern made it clear things are about to go from bad to worse for those expecting NBA basketball, and in particular for NBA players, if they’re looking for a better deal from ownership.

“Well, what we have to do is we have to account for the losses that we're suffering, so those losses will be factored in as we move forward. You know, on the system issues frankly, our first proposal was the NFL cap; our second proposal was the NHL cap, and the union said no go, so we said, all right, let's work on a tax system, and we worked hard to craft a tax system, but that is a very harsh tax, but still allowed teams to go above it, and we can't reach agreement on that. We're not even close.”

Much has been written about basketball related income (BRI). In the last CBA, NBA players took 57% of BRI. The latest NBA proposal had owners offering the players 46% while the players steadfast at 53%.

There had been suggestions the two sides “might” agree on a 50-50 split but Stern says that was never on the table.

BRO isn’t the only issue however. The biggest issue may be the owners demand for a hard salary cap. The NBA began using a “soft” salary cap at the start of the 1984-85 season.

The current CBA allows teams to exceed the salary cap as long as they’re prepared to pay a dollar for dollar tax once they exceed it. To a billionaire owner in a major market it’s nothing more than a minor deterrent.

The NBA wants a hard salary cap. There had been suggestions the league would remove their insistence for a hard cap but create a tax system. The players are afraid that if a hard salary cap is agreed to, ownership would be less likely to sign players to long term deals.

Isn’t that the point, doesn’t that make sense. If a player has a great season he should be paid for that great season. But if a player doesn’t deliver what he’s been paid to deliver shouldn’t that player be paid accordingly?

There are those who compare the recent National Football League labor issues to the NBA. NFL games were never going to be cancelled. There are more than 800 NFL players and their careers average two or three years. There was no way NFL players were going to miss a game.

The NFL generates more than $9 billion annually, the NFL isn’t just a sports business, its one of the biggest money making machines in all of corporate America.

"I said a year ago that the NFL would settle in August, and I said the NBA would not settle and would probably lose the entire season, and I think that's exactly what's going to happen," Indiana law professor and sports and antitrust law expert Gary Roberts said in a USA Today report.

"There are fundamental issues that make it almost impossible for the parties to resolve (the lockout) without some major changes. Both sides believe sincerely that the major changes that need to be made need to be made by the other side."

Safe bet – the earliest the NBA season will start is Christmas Day. If the entire 2011-12 season is cancelled then fans might start to get angry and care, but for the short-term the NBA lockout will fill the pages of this website and blog for the foreseeable future.

About Me

The evolution of Howard Bloom’s career took a dramatic change in the spring of 1997, when Howard began publishing SportsBusinessNews.com. In its fifteen years, SBN has evolved into the largest and one of the most influential sports industry publications.